Australia: International arbitration in the UAE - Dubai, a two-seater city

Last Updated: 14 October 2012
Article by Nigel Duffield

Most Read Contributor in Australia, October 2017

Key Points:

If you are entering into contracts in the UAE, the Dubai International Financial Centre is becoming a viable alternative to Dubai or Abu Dhabi as a seat for arbitration, but comes with its own complications and teething problems.

Famous for constructing the tallest building in the world (the Burj Khalifa) and the largest shopping mall (the Dubai Mall), Dubai is an oddity in legal circles in that it has two distinct seats and legal frameworks for arbitration: Dubai itself and an "offshore" free zone within Dubai, the Dubai International Financial Centre.

The seat of arbitration (also referred to as the place of arbitration) is an important part of any arbitration agreement. In the absence of a clear statement by the parties otherwise, the seat will dictate the procedural law under which the arbitration will be run. For example a seat of London will dictate that an arbitration will be governed by English law, being the Arbitration Act 1996

The Dubai International Financial Centre is currently gaining popularity as the nominated seat of arbitration for contracts entered into in the United Arab Emirates. So why is this and how is a seat in the Dubai International Financial Centre different to a seat in Dubai?

According to the Department of Trade and Foreign Affairs, the United Arab Emirates (UAE) is a major trading partner of Australia. This is evident when you visit the UAE where over 100 large Australian service firms have offices, a significant number of these being in the construction sector. Indeed, the firm responsible for installing the Dubai Mall aquarium, which set a new Guinness World Record for the largest ever acrylic panel, was Australian.

Dispute resolution in the UAE

Arbitration is the most popular form of dispute resolution for commercial transactions in the UAE. According to a document published by the Dubai International Arbitration Centre (DIAC), in the first half of 2010, 182 new arbitrations were commenced in the DIAC with a value in dispute of around $626m.

A key reason for this popularity is the difficulty, particularly for non-Arabic parties, of conducting disputes in the local UAE courts. Litigation is conducted entirely in Arabic. While Arabic is the legal language of the UAE, ie. all official communications are in Arabic, English is predominantly the business language. All English documents must be translated if they are to be entered into evidence in litigation and all non-Arabic speaking witnesses must give oral evidence through a translator. This makes the local courts a particularly difficult environment to operate in if you do not speak and read Arabic.

The legal framework for arbitration in the UAE

Similar to Australia there are both Federal and State (Emirate) laws in the UAE. UAE Civil Procedure Code, Federal Law No. (11) of 1992, a Federal Law, provides the legal framework under which arbitrations with a seat in Dubai, Abu Dhabi or indeed any of the other five emirates are run.

However, within Dubai there is also the Dubai International Financial Centre (DIFC) which has its own arbitration law, DIFC Arbitration Law 2008. The DIFC is one of a number of "offshore" free zones established to encourage international investment and trade. The DIFC also has an arbitration centre and rules established in conjunction with the LCIA (the London Centre of International Arbitration).

Dubai as a Seat under UAE Federal Law

The UAE has a civil law system whereby its laws are codified within statutes. Not surprisingly UAE Law is drafted in Arabic and while English translations exist, none are official. Furthermore, many of the commentaries useful for interpreting and understanding the law are written in Arabic and few are translated.

As discussed above, the legal framework under which arbitrations with a seat of Dubai are run can be found within the UAE Civil Procedure Code, Federal Law No. (11) of 1992. However, the focus of the Civil Procedure Code is court litigation and the articles relating to arbitration are somewhat brief (15 in total) and often difficult to interpret.

An advantage of UAE arbitration law is that it is tried, tested, reasonably robust and internationally recognised. Plus there are a number of judgments from the highest court in the UAE, the Court of Cassation, which while having no precedent value, do provide useful guiding principles for practitioners.

A new separate comprehensive arbitration law has been on the table in the UAE for a number of years but has yet to be agreed and enacted.

The DIFC as a seat under DIFC Law

The DIFC has its own distinct legal system based on common law principles. It has its own court system with proceedings conducted in English and its own laws drafted in English. Being a common law based system it has a certain familiarity to Australian businesses and their lawyers.

Arbitration in the DIFC is not governed by the UAE Federal Law but by the DIFC's own arbitration law, DIFC Arbitration Law 2008. This is a comprehensive law based on the UNCITRAL Model Law on International Commercial Arbitration. It will be familiar to Australian arbitration lawyers, having the same basis as the new Australian arbitration laws.

A disadvantage of DIFC as a seat of arbitration is its relative newness. Few arbitrations have been conducted under DIFC law and it has been found to be not without its teething problems. As an example, a recent judgment handed down by the DIFC courts refused an application to stay a DIFC court proceeding where an arbitration had been legitimately commenced with a seat outside of the DIFC (Injazat Capital Limited and Injazat Technology Fund BSC v Denton Wilde Sapte).

The decision by Justice Sir David Steel was based on a glitch in DIFC law rendering such orders impossible to make. Both the UAE and the DIFC are bound by the terms of the New York Convention and as Justice Steel commented "It is fair to say that this constitutes on the face of it a failure to implement the terms of the New York Convention to which the Emirates are a party."

Another issue to be aware of is the two-step enforcement process necessary before a DIFC arbitral award can be enforced in the UAE outside of the DIFC free zone. Firstly, it has to be recognised by the DIFC courts and then ratified by the Dubai courts under UAE law.

In theory a DIFC seated arbitration award is directly enforceable in another jurisdiction under the New York Convention. However, a recent DIFC court white paper suggested it might be a safer route to get the award ratified first by a Dubai court.


If you are entering into contracts in the UAE, the Dubai International Financial Centre is becoming a viable alternative to Dubai or Abu Dhabi as a seat for arbitration. However, caution should be exercised given the DIFC legal system is relatively new and not without its complications and teething problems.

Consideration should also be given to nominating an Australian seat of arbitration, particularly given the recent alliance between the Australian Centre for International Commercial Arbitration and the Abu Dhabi Chamber of Commerce and Industry.

You might also be interested in ...

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.